Currently, the world is in the midst of a significant transformation in the way companies worldwide operate. All industries, without exception, are being disrupted by the era of digital transformation and innovation.
Currently, the world is in the midst of a significant transformation in the way companies worldwide operate. All industries, without exception, are being disrupted by the era of digital transformation and innovation. While every organisation operating today is different, all face a common challenge – they must be successfully led through technological advancements and new working principles brought by digitalisation. However, a question remains whether the digital revolution will inhibit or enhance one’s leadership skills and what skills will be most relevant to those leading companies in a digital environment?
How is digital transformation shaping organisations?
In 2020, the World Economic Forum acknowledged that increasing business digitalisation poses several challenges for organisations and specifically for those who lead such organisations. Leaders of this era have to adopt a new, specialised leadership style driven by this industry’s specific needs to accelerate the process of innovation and learning in organisations. Organisations also need to change their HR practices and design their leadership training programmes to enhance the development of a variety of skills required to thrive in a digital environment.
Many private organisations globally started focusing on the exploitation of digital opportunities. For example, big organisations like BMW and other car manufacturers use factory digitalisation to increase the quality, accuracy and speed of their production. Non-governmental organisations like the United Nations are not far behind, leading the discussions about the need to “unlock the new opportunities offered by industry 4.0 to drive positive change”. Several world governments have also started acknowledging that the competitive advantage cannot be achieved without a focus on the future, including the adoption of technological advances, such as robotics and preparing the leaders of this new technological, high-paced and high-uncertainty era.
Given technology and other developments are having, and continue to have, a significant impact on business organisations, and therefore on current and future leaders and followers, how can leaders build capabilities required to lead an organisation across digital transformation?
How to be a leader in a digital age?
Research in 2018 by Schwarzmüller and his team found that digital transformation brings significant changes to leadership and work design, given the increased complexity of leading organisations through ever-changing industry complexities. This amplified complexity means leaders require a higher level of resilience to meet the demands of the VUCA environment (volatility, uncertainty, complexity and ambiguity) and to exhibit high-performance leadership. In order to do so, the expanding role of the leader might become more individualised and relationship-oriented. Leaders should place more focus on an agile and scalable digital infrastructure that allows them to connect with their followers continuously. Besides, a leader should also develop a positive working environment for such virtual collaboration and unity, which might have implications for the workplace culture change as a result of new ways of working.
Another vital skill that is often mentioned in relation to digitalisation is the leader’s ability to adapt and pivot. With the speed of technology change, successful and influential leaders must be able to perform multiple behaviours and roles in order to lead their organisations into the digital future. Other skills often linked with leadership in the digital world include communicating through digital media, high-speed decision making, managing disruptive change, managing connectivity, and the renaissance of technical skills.
How will the future of leadership look like?
Leadership is not a ‘thing’, but a ‘movement’ and therefore, this dynamic process requires a clear, adaptive involvement from a leader. Moreover, current crises, digital transformation and other turmoil caused by digitalisation and technological developments mean that leadership has never been in greater demand, or indeed under more scrutiny.
Leadership research is growing considerably, and there are many different theories, models and frameworks to explain the process of leading. Given all the above, perhaps a new model for leadership in the context of digitalisation is required, that would expand on or connect emerging leadership theories pertaining to digitalisation, such as virtual or e-leadership.
Although some traditional leadership qualities, like communication, will likely remain important in the digital age, there will also be new requirements for leaders to make rapid decisions, develop technical skills and connect with followers through new mediums such as social media. In addition, the organisational structures of many organisations are likely to change or become flatter, more flexible and/or ever-changing in future due to the need for a leader to address digital disruptions and change continuously. All the above will inevitably challenge leadership, and therefore leaders should prepare for minimising digital challenges and maximising digital opportunities.